Thursday, July 31, 2008

Guesstimates on July 31, 8:15 am ET

Spiders - September S&P E-mini Futures: I think the e-minis are now on the way to 1325. Support today is at 1260. I am long from 1240.50. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.  

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. Resistance above the market is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. Resistance above the market is at 158.50. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: I think that the market is now headed for 100. The 131 level is now resistance. 

GLD - August Gold: Gold is headed for 750.  Resistance above the market is at 960. 

SLV - September Silver: Silver broke support at 1750 Friday so I think the market is now headed for 1250.  

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Wednesday, July 30, 2008

Guesstimates on July 30, 8:15 am ET

Spiders - September S&P E-mini Futures: I think the e-minis are now on the way to 1325. Support today is at 1248. I am long from 1240.50. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. Resistance above the market is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. Resistance above the market is at 158.50. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: I think that the market is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: Gold is headed for 750.  Resistance above the market is at 960. 

SLV - September Silver: Silver broke support at 1750 Friday so I think the market is now headed for 1250.   

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Tuesday, July 29, 2008

Guesstimates on July 29, 8:20 am ET

Spiders - September S&P E-mini Futures: Yesterday’s close below 1239 support was not encouraging, but this morning the market has moved back above 1239. I just bought September e-minis at 1240.50 and I plan to stay with this position unless the e-minis close today below 1237. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. Resistance above the market is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. Resistance above the market is at 158.50. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: I think that the market is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: Gold is headed for 750.  Resistance above the market is at 960. 

SLV - September Silver: Silver broke support at 1750 Friday so I think the market is now headed for 1250.   

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Monday, July 28, 2008

The Image Speaks For Itself

Guesstimates on July 28, 8:15 am ET

Spiders - September S&P E-mini Futures: Support is still at 1239 while resistance above the market is at 1265. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. Resistance above the market is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. Resistance above the market is at 158.50. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: Gold is headed for 750.  Resistance above the market is at 960. 

SLV - September Silver: Silver broke support at 1750 Friday so I think the market is now headed for 1250.  

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Friday, July 25, 2008

Guesstimates on July 25, 8:15 am ET

Spiders - September S&P E-mini Futures: Support is still at 1239 while resistance above the market is at 1265. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. Resistance above the market is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: Gold broke below 935 support yesterday so now I think it is headed for 750.   

SLV - September Silver: Silver is still holding support at 1750 but a break below there will mean that the market is headed for 1250. 

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Thursday, July 24, 2008

Guesstimates on July 24, 8:15 am ET

Spiders - September S&P E-mini Futures: The market reached resistance at 1290 yesterday and I think the next development will be a break of 40-50 points. Support is still at 1239. I also think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108.   

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: Gold broke below 935 support yesterday so now I think it is headed for 750.   

SLV - September Silver: A break below 1750 support will mean that the market is headed for 1250. 

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Wednesday, July 23, 2008

Guesstimates on July 23, 8:15 am ET

Spiders - September S&P E-mini Futures: The market is getting close to resistance at 1290 and I think the next development will be a break of 40-50 points. Support is still at 1239. I also think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.  

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108.  

Euro-US Dollar: I think the market is on its way to 163. Support is now at 157.50 and a New York close below that level will mean that the trend has turned downward. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 935. 

SLV - September Silver: I think silver is the way to the 2100 level. Support is at 1750. 

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Tuesday, July 22, 2008

Guesstimates on July 22, 8:30 am ET

Spiders - September S&P E-mini Futures: Support today is at 1239. I think that the market will make it up to 1290 before a break of 40-50 points develops. I also think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108.  

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.   

XLE - OIH - USO – September Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 935. 

SLV - September Silver: I think silver is the way to the 2100 level. Support is at 1750. 

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Monday, July 21, 2008

The Bearish Drumbeat Goes On



Here are some more front page and cover stories designed to make you feel good about being invested in the stock market- not!  I think that the Economist's choice of the word "chaos" and Business Week's color scheme of red and black (the colors of panic) together with the image of a serpent speak volumes about the public mood. The US stock market will move much higher over the next six months. 

Guesstimates on July 21, 8:15 am ET

Spiders - September S&P E-mini Futures: The futures are nearing the 1275 level but it still seems to me that the market can rally for a good part of this week before a drop 40-50 points begins. I think we will see the 1290 level before any significant reaction develops. I also think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108.   

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.   

XLE - OIH - USO – August Crude: Crude broke below 133 support so I think that it is now headed for 100. The 133 level is now resistance. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 935. 

SLV - September Silver: I think silver is the way to the 2100 level. Support is at 1750. 

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Friday, July 18, 2008

Guesstimates on July 18, 8:20 am ET

Spiders - September S&P E-mini Futures: I expect the rally from 1200 to reach the 1275  level before any significant reaction of 30 points or so sets in. At Tuesday’s low there were many bullish divergences in the advancing issues numbers which themselves are still at extreme “oversold” levels. This together with the gloomy state of sentiment convinces me that this rally is the first stage of a very big move which will carry the market to 1500. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The trend has turned downward once more and the bonds are headed for 109. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.   

XLE - OIH - USO – August Crude: Crude broke below 133 support yesterday so I think that it is now headed for 100.  

GLD - August Gold: I think the market is headed back to 1000. Support is at 935. 

SLV - September Silver: I think silver is the way to the 2100 level. Support is at 1750. 

Google: GOOG got hammered after its earnings release yesterday afternoon. However the 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 

Thursday, July 17, 2008

Guesstimates on July 17, 8:15 am ET

Spiders - September S&P E-mini Futures: I expect the rally from 1200 to reach the 1275  level before any significant reaction of 30 points or so sets in. There are many bullish divergences in the advancing issues numbers which themselves are still at extreme “oversold” levels. This together with the gloomy state of sentiment convinces me that this rally is the first stage of a very big move which will carry the market to 1500. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: Support is at 115-00 and as long as that holds I’ll stick with my 118-00 upside target. 

September 10 Year Notes: Support is at 113-24 and as long as that holds I’ll stick with my 117-16 upside target.   

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.   

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 2100 level. 

Google: I think the reaction in GOOG is complete and that the move above the 750 level is underway. 

Wednesday, July 16, 2008

Guesstimates on July 16, 8:15 am ET

Spiders - September S&P E-mini Futures: I think the market has a good shot at 1240 today and if it gets there the odds will favor continuation up at least to 1265. There are many bullish divergences in the advancing issues numbers which themselves are at extreme “oversold” levels. This together with the gloomy state of sentiment convinces me that an very big rally is imminent and that this mini-bear market is near its end. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: Support is at 115-00 and as long as that holds I’ll stick with my 118-00 upside target. 

September 10 Year Notes: Support is at 113-24 and as long as that holds I’ll stick with my 117-16 upside target.  

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 2100 level. 

Google: GOOG should find support at 506 or so and the next development will be a move to new bull market highs.  

Tuesday, July 15, 2008

Guesstimates on July 15, 8:15 am ET

Spiders - September S&P E-mini Futures: The e-minis broke below 1225 last night and the next chance for a rally will be from the 1208 level. There are many bullish divergences in the advancing issues numbers which themselves are at extreme “oversold” levels. This together with the gloomy state of sentiment convinces me that an very big rally is imminent and that this mini-bear market is near its end. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: Support is at 115-00 and as long as that holds I’ll stick with my 118-00 upside target. 

September 10 Year Notes: Support is at 113-24 and as long as that holds I’ll stick with my 117-16 upside target.  

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 2100 level. 

Google: GOOG should find support at 506 or so and the next development will be a move to new bull market highs.  

Monday, July 14, 2008

That's All!

I just bagged my e-minis at 1235 again. I was looking for a strong move into the close but instead the market has been trading sideways for the last 15 minutes.

E-minis

I just bought back at 1236 the e-minis I sold earlier at 1235. I want to see a close above 1240 or I'll be getting out. 

A Comment on 1987

Here is a short addendum to the last post which was a reply to Tom.

I was trading S&P's back in 1987. I remember the crash very clearly. On Friday October 16 I told my clients that the worst was yet to come, but of course I did not anticipate the crash that developed on Monday, October 19.

However my bearish assessment then was based on the simple fact that the market had been going down without any push from negative news. Indeed, after the crash many commentators observed that there was no news that would have justified such a big drop in so short a time.

The situation now is completely different.  The market has been going down but it has been pushed by an unrelenting stream of bad news. This is not the stuff of an imminent crash. The news has been baked into prices already. Something much worse than is already known or anticipated would have to happen to drop this market a lot  from here. 

Reply to To Tom

Tom asked an interesting question in a comment a little while ago and I thought I'd post his question and my reply.

First his question:


 tom said...

This is not a slam on your prediction but a legitimate question. The market was equally as oversold right before it crased in 1987. Equities seemed a compelling buy on Oct. 16th and as you know they became even a better buy on the 19th. 

It doesn't seem like we have seen the capitualtion we need to form a bottom. 

Crash or rally from here and why?


Here is my reply:


Blogger carl futia said...

Well, I just googled the three words: capitulation stock market. I got 155,000 hits. The first 10 pages were almost exclusively recent ones.

This is at least a little bit of evidence that an awful lot of people are looking for "capitulation" before being buyers. Frankly, I don't believe the market can accommodate so many eager buyers, so I doubt it will give them the chance they are looking for.

Along the same lines I might also observe that "capitulation" is generally arises from fear that is induced by falling prices, not by news events in the economy. But prices are low now because there has been a ton of bad news over the past 6 months. What surprises me is that the averages are not much lower than they in fact are today. Who is buying?

7/14/2008 01:49:00 PM


Crystallizing Events





One thing that often helps to identify market and sentiment extremes is what I call the crystallizing event. It is usually an event in the economy or the political word that embodies or affirms the reasons for the current level of bearish or bullish sentiment. 

Right now there is a lot of bearish sentiment in the markets. Last Friday one of the largest mortgage lenders in the country, IndyMac Bancorp failed and was taken over by the FDIC. Friday also saw a panic by shareholders of Fannie Mae and Freddie Mac. Trading in their shares reached record levels and in early morning trading these stocks had fallen  50% from Thursday's close.

Above this post you see two screen shots of MarketWatch, one taken at 10:45 am ET and the second at 3:01 pm ET. Above those screen shots you will find images of the front page of the New York Times for Friday, Saturday, and this morning.

I think the triple whammy of IndyMac and Fannie and Freddie will mark the bearish extreme of sentiment and of the stock market averages.  Things will start to look better from here on.

Guesstimates on July 14, 8:20 am ET

Spiders - September S&P E-mini Futures: I am long the e-minis from 1233 and am working a 1235 stop today. I think the rally from Friday’s 1225 low will carry at least to 1290. I also think that it is the first stage of a much bigger move to 1500. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: Support is at 115-00 and as long as that holds I’ll stick with my 118-00 upside target. 

September 10 Year Notes: Support is at 113-24 and as long as that holds I’ll stick with my 117-16 upside target.  

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 1950 level. 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   

Friday, July 11, 2008

Just for Fun

I thought it would be interesting to tabulate the number of short term bullish versus short term bearish stock market comments on the blog this week.

So far there have been 9 short term bullish comments against 30 bearish ones, a bearish percentage of 77%.

This pretty much matches what I think I see among the public in general and investors in particular.

E-mini update

I just bought the September e-minis at 1233.  If they drop below 1220 today I'll get out.  Ditto if I show a loss at the close

Guesstimates on July 11, 8:15 am ET

Spiders - September S&P E-mini Futures: I think we shall see a 1230 print before a rally to 1310 begins. And any such rally will be the first stage of a much bigger advance to 1500. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.    

TLT - September Bonds: The bonds are headed upward to 118-00. 

September 10 Year Notes:  The notes are headed for 117-16. 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.   

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 1950 level. 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   

 

Thursday, July 10, 2008

Guesstimates on July 10, 8:15 am ET

Spiders - September S&P E-mini Futures: I didn’t expect the market to drop back near its lows yesterday. That weakness means that we will probably see a 1230 print before a rally to 1310 and eventually much higher begins. Strength today above the 1263 level will mean that the rally to 1310 has already begun. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.  

TLT - September Bonds: The bonds are headed upward to 118-00. 

September 10 Year Notes:  The notes are headed for 117-16. 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 1950 level. 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   

 

Wednesday, July 09, 2008

Retirement Fears





Over the past couple of weeks I have been reading blogs, newspaper articles, market information sites, magazines, etc to get some sense of how market people view the sentiment picture in the stock market.  I would summarize my findings by saying that the typical analysis goes like this: yes, people are turning bearish but they are not bearish enough to support a substantial rally, let alone a bull market.

This is a quite typical situation at market turns - there are always good reasons to think the low or the high still lies ahead of us. "Not yet, Not yet" is the common refrain.

My own view is that sentiment is about as dark as I have ever seen it. It is as bearish as it was near the 2002 bear market low. I've commented many times over the past six months on this condition. 

Above this post you will find some more evidence for my assessment. The first piece is the latest cover from Business Week: Retirement Strategies for Tough Times. I love the phrase tough times. It evokes the usual description of the depths of the Great Depression, and of  the recessions of 1974-75 and 1981-82. But as far as I can determine, we are not in even a mild recession and one is not likely to start this year

The cover right above the Business Week cover is the Time Magazine cover of July 29, 2002. This was virtually the exact low of the 2000-2002 bear market. Note the similarity in sentiment - fears about retirement.

The two charts at the top of this post show the Investor's Intelligence poll of newsletter sentiment. With the latest reading of 47.30% bearish, this bearish percentage is higher than at any time during the past 14 years, including the 1998 panic low and the 2002 bear market low. Wow!

This market is going much, much higher.

Guesstimates on July 9, 8:10 am ET

Spiders - September S&P E-mini Futures: The e-minis are headed for 1310. Theis rally should prove to be the first stage of an extended move to 1500 over the next few months. Support today is at 1250. 

QQQ: I think the Q’s have ended their reaction. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.   

TLT - September Bonds: The bonds are headed upward to 118-00. 

September 10 Year Notes:  The notes are headed for 117-16. 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 1950 level. 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   

Tuesday, July 08, 2008

Guesstimates on July 8, 8:20 am ET

Spiders - September S&P E-mini Futures: The market’s rapid swings up and down over the past few trading days are part of a base building process which will support a move back to 1500.  In the meantime the 1235 level is support. A move above 1265 should continue upward to 1310 or so.

 

QQQ: I think the Q’s will end their drop near 44.00 and begin a rally to 55.  

 

TLT - September Bonds: The bonds are headed upward to 118-00.

 

September 10 Year Notes:  The notes are headed for 117-16.

 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80.

 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

 

XLE - OIH - USO – August Crude: Crude is headed for 160-165.

 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915.

 

SLV - September Silver: I think silver is the way to the 1950 level.

 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   

 

Monday, July 07, 2008

The Tribune Chimes In

Here is an image of the first page of today's Chicago Tribune business section.  

Guesstimates on July 7, 8:20 am ET

Spiders - September S&P E-mini Futures: Thursday the market briefly took out the March low at 1253 but then closed back above 1260 and above Wednesday’s close. The US markets were closed Friday but in electronic trading the e-minis held above Thursday’s low. All in all it looks like the market is about to move up at least to 1290 and more probably into the 1310-20 range. I think the stage is being set for an extended rally up to 1500 later this year.

 

QQQ: I think the Q’s will end their drop near 44.00 and begin a rally to 55.  

 

TLT - September Bonds: The bonds are now headed upward to 118-00.

 

September 10 Year Notes:  The notes are now headed for 117-16.

 

Euro-US Dollar: Resistance at 158.00 was broken yesterday. I think the market is on its way to 163. Support is at 155.80.

 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

 

XLE - OIH - USO – August Crude: Crude is headed for 160-165.

 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915.

 

SLV - September Silver: I think silver is the way to the 1950 level.

 

Google: GOOG will drop into the 500-510 range and will then begin a move to 750 or above.  

 

Sunday, July 06, 2008

Upcoming Recession - NOT!

Here is a chart of the Intrade prediction market contract for the probability that a recession starts during 2008 in the United States. The numbers on the right hand are the price of the contract and represent the probability that a recession develops in 2008. The smooth line is the 50 day moving average of the contract's price.

You can see that recession probability was estimated to be highest in January and March, and that it dropped precipitously during April, May, and June. The probability is still hovering near 30% despite the dramatic drop in the market averages during the past 7 weeks. 

My guess is that the Intrade traders think that the financial crisis which occupied the headlines in March is past, and with it the danger of any recession in 2008. Now maybe the stock market is trying to tell us something the Intrade speculators don't know, but I doubt it. In any case I think this divergence between the recession probability and the stock market drop over the past 7 weeks is a bullish omen.

The Bear is Back!

Here is the cover of the latest issue of Barrons. It speaks for itself. Since Barron's has a financial cover every week its covers are not as significant as NY Times headlines or the cover stories of news weeklies like Newsweek or Time Magazine. Even so the cover reflects the editors' best judgment of what the public wants to hear since they are in the business of selling newspapers. 

Thursday, July 03, 2008

Guesstimates on July 3, 8:15 am ET

Spiders - September S&P E-mini Futures: The initial rally from the 1261 low carried the market to only 1293 instead of the 1310 level I was looking for. Consequently I think the yesterday’s break will bring the e-minis down into the 1230-40 range before the market turns upward. A higher close today, regardless of the level of today’s low, will mean that a very substantial rally is underway. I still think we shall see 1500 later this year.

QQQ: I think the Q’s will end their drop near 44.00 and begin a rally to 55.

TLT - September Bonds: The bonds are now headed upward to 118-00.

September 10 Year Notes: The notes are now headed for 117-16.

Euro-US Dollar: Resistance at 158.00 was broken yesterday. I think the market is on its way to 163.

Dollar-Yen: The yen is headed for 103.50. From there the rally to 112.00 will resume.

XLE - OIH - USO – August Crude: Crude is headed for 160-165.

GLD - August Gold
: I think the market is headed back to 1000.

SLV - September Silver
: Silver closes above 1760 yesterday so I think it is the way to the 1950 level.

Google
: GOOG will drop into the 500-510 range and will then begin a move to 750 or above.

Wednesday, July 02, 2008

Guesstimates on July 2, 8:20 am ET

Spiders - September S&P E-mini Futures: The initial rally from the 1261 low yesterday should carry the market back to 1310 or so. I expect to see a number of 2 day rallies and breaks over the next week or so as the market prepares for a move to 1500.

QQQ: I think the Q’s will hold support in the 45-46 range and then begin a rally to 55.

TLT - September Bonds: The bonds are now headed upward to 118-00.

September 10 Year Notes: The notes are now headed for 117-16.

Euro-US Dollar
: Resistance is still at 158.00. I think the market is on its way to 140.

Dollar-Yen
: The yen is headed for 112.00. Support is now at 103.00.

XLE - OIH - USO – August Crude
: Crude is headed for 160-165.

GLD - August Gold
: I think the market is headed back to 1000.

SLV - September Silver
: Silver closes above 1760 yesterday so I think it is the way to the 1950 level.

Google: GOOG will drop into the 500-510 range and will then begin a move to 750 or above.

Tuesday, July 01, 2008

Hulbert Speaks !

One useful sentiment indicator that I like to use as a check on my own assessments is Mark Hulbert's stock market newsletter sentiment index which he has been constructing since 1997. It measures the average portfolio allocation, long or short, to stocks by the market timing newsletters Hulbert follows. You can read his latest commentary on this indicator here.

According to Hulbert the index is currently at - 35.9 %, the lowest reading in almost 8 years and in particular a lower reading than was seen at the bottom in March and at the bear market lows in 2002. The fact that market timers advocate a record setting net short position is a very bullish omen and reinforces the observations I made yesterday.

Guesstimates on July 1, 8:20 am ET

Spiders - September S&P E-mini Futures: The S&P’s will probably drop to 1262 today but the subsequent rally should take the market to 1310 and be the initial leg up to 1500. The 10 and 20 moving averages of NYSE issues are below the low established last March and November while there is currently a bullish divergence in the 5 day moving average. The longer term oscillators shown on the MY CHARTS link on the right hand side of this blog are also showing bullish divergences relative to the low levels reached in March.

QQQ: I think the Q’s will hold support in the 45-46 range and then begin a rally to 55.

TLT - September Bonds
: The bonds are now headed upward to 118-00.

September 10 Year Notes: The notes are now headed for 117-16.

Euro-US Dollar
: Resistance is still at 158.00. I think the market is on its way to 140.

Dollar-Yen
: The yen is headed for 112.00. Support is now at 103.00.

XLE - OIH - USO – August Crude
: Crude is headed for 160-165.

GLD - August Gold
: I think the market is headed back to 1000.

SLV - July Silver
: Resistance above the market is at 1760. It is holding so far but a close above there will turn me bullish.

Google: GOOG will drop into the 500-510 range and will then begin a move to 750 or above.